The government is planning a draft bill introducing limited prisoner voting rights to comply with the European court of human rights, despite fierce opposition from Eurosceptic backbenchers.

But embarrassed government ministers are likely to defer the hugely controversial announcement until just before a late-November deadline, allowing it to be made after the police commissioner elections on 17 November.

One government source said: "No party wants to put this in their 'last week grid' for these elections. The final decision will be made very late."

The announcement is still causing friction, with one coalition source saying most of the dispute is now "a blue-on-blue row", within the Conservative party.

David Cameron has said it would make him sick to give prisoners the right to vote, but he allowed the then Cabinet Office minister Mark Harper to propose that prisoners serving a sentence of four years or less should be given the right.

Harder-line Tory backbenchers, such as Dominic Raab, have argued there is practically no danger of a fine by the European court should Britain not introduce votes for prisoners, and absolutely no chance of the UK being kicked out of the Council of Europe. But the attorney general, Dominic Grieve, has told ministers they have to accept the ruling of the European court in Strasbourg after repeated appeals have failed. Grieve has been an exponent of reform of the court, but not UK withdrawal, saying that would make Britain a pariah state.

Liberal Democrat ministers still support compliance with the court, but do not want to be seen any longer to be in the vanguard on an issue that is likely to make them deeply unpopular. Labour does not favour prisoner voting rights but does not want to be seen to be ignoring the court.

The political advantage of agreeing to publish a draft bill is that the government would not be seen to be in open defiance of the European court in that it would be taking steps with the court order to introduce legislation on prisoners' rights.

Yet, in practice, a draft bill might take years to reach the statute book, since it would require wide consultation and allow amendment by a joint committee of both houses. The two alternatives are to table a fresh Commons motion, or to publish a bill.

In a marathon legal battle going back to 2004, the court has repeatedly ruled that a general and automatic disenfranchisement of all serving prisoners was incompatible with European law.

The UK government was given six months from a judgment in Scoppola v Italy on 22 May 2012 to bring forward legislative proposals to amend the law.

But the court has also accepted that member states should have a wide discretion as to how they regulate a ban on prisoner voting, in terms of the kind of offence, length of prison sentence, and the discretion given to individual judges to determine a prisoner's right to vote.

The British government's already acute dilemma has been deepened by the Commons overwhelmingly passing a motion in February 2011 stating that it supports "the current situation in which no sentenced prisoner is able to vote except those imprisoned for contempt default or reprimand". The motion was passed by 234 to 22.

The debate was led by the prominent Tory backbencher David Davis and by the former Labour justice secretary Jack Straw. Davis argued: "If you break the law, you cannot make the law." Straw asserted: "The issue of prisoners voting rights was by no stretch of the imagination a breach of fundamental human rights but was a matter of penal policy which the minority of judges at Strasbourg said should be left to the UK parliament." He accused the Strasbourg court of trying to set itself up as "the supreme court of Europe".

Ministry of Justice sources denied they would comply with the ruling by publishing a draft bill, and stressed they were the lead department on the issue and opposed the right of prisoners to vote. They refused to discuss the state of internal negotiations, or whether a draft bill might be a means of deferring a decision. No 10 also deniedthere had been any decision to give prisoners voting rights.

• The headline of this article was amended to 24 October 2012 to make clear that the ruling on prisoner votes was from the European court of human rights rather than the European Union.